Expert: AXA Groups' influence on Azerbaijani insurance market depends on company's regional strategy
Azerbaijan, Baku, Oct. 20 / Trend A.Akhundov, I.Khalilova /
Level of the French insurance company AXA Group's influence on the Azerbaijani market depends on the company's strategy in the region, Board Chairman of the Azerbaijani Insurance Company Pasha Sıgorta Nofel Rzayev said.
"We have not yet had the opportunity to communicate with AXA. I'm not familiar with the company's strategy in Azerbaijan," Rzayev said. "However, given the role and place of AXA in the world insurance market, this should positively affect the situation in MBASK [where AXA Group acquired a controlling stake] and improve the professional level of the company. Time will show how this will affect the insurance market as a whole. Everything depends on the attitude and strategy in the region."
He said the arrival of any professional player in the market is normal.
"There are strong players such as AIG, Groupama, and now AXA in Azerbaijan. Brand is not yet an indication that it will successfully operate in Azerbaijan. We hope that AXA will also work professionally here, as in France, Switzerland and other European countries," Rzayev said.
Deputy Chief of the Azerbaijani State Insurance Supervision Service at the Finance Ministry Mahir Abdullayev regards the increase of foreign investment in the market as positive. Although the presence of foreign insurers increases competition in the market, local companies should try and take the appropriate measures for development. The arrival of foreign investors in the insurance market increases the responsibility of local insurers, which must either work a lot, or leave the market.
Alfa Sigorta insurance company Board of Directors chairman Khayal Mammadkhanli believes the competition will improve quality of services provided by the local insurers. Given the Azerbaijani mentality, where a connection is relevant, clients of the operating companies will not leave them, despite existence of big players in the market. On the other hand, Mammadkhanli said, the Azerbaijani insurance market has great potential estimated at one billion manat. The insurance market may grow to this level at the expense of the mass involvement of people, in connection with what a program to promote security and higher insurance literacy is under development.
Mammadkhanli said the country's regions have greater interest in insurance than Baku, so insurance companies have to go and offer their services outside the capital. He believes the Azerbaijani insurers should introduce new insurance products needed by the market to eliminate the dependence on the banking sector.
He believes that European investment can be very effective for the development of life insurance in Azerbaijan, which is new in the country.
AXA Group's entrance to the Azerbaijani market will contribute to increasing the share of the insurance market in the country's GDP, the head of new market development for AXA's Mediterranean and Latin America operations, Frederic Flejou, said in Baku at the signing ceremony of the contract.
"Today, the insurance market's share in the country's GDP is low - 0.5 percent, we would like to see this figure at about 8 percent of GDP," Flejou said.
"The volume of the Azerbaijani insurance market now stands at $200 million. Our participation will increase the share of the insurance market in the country's GDP to 2-3-percent level," he said.
AXA Group bought shares of the European Bank for Reconstruction and Development (EBRD) in Azerbaijani MBASK's capital. AXA Group subsidiary - AXA Seguros Generales acquired a controlling stake by purchasing the Bank's shares in capital of MBASK, where the bank owned 30 percent shares and 21 percent of company's principle shareholder Eldar Garibov. Garibov will own the remaining share of 49 percent.
AXA provides services for life and health insurance, contributions, the international insurance and reinsurance, financial management, and others. The headquarters of AXA Company founded in 1816 is located in Paris. AXA employs 216,095 employees and it has 96 million customers worldwide.
According to Fortune magazine, AXA occupies the ninth position in the list of 500 largest companies in the world.
There are 27 insurance companies and one reinsurance company in Azerbaijan. The number of insurance companies with foreign capital is five.
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